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IOLProperty - South African Property For Sale
Thursday Oct 25, 2012

Talks with Sharks to aid Durban's Mabhida Stadium

eThekwini's audit and risk committee has advised the city's executive to reopen negotiations with Sharks bosses in an effort to stem losses from the Moses Mabhida Stadium.

The committee, made up of independent experts, also recommended the city consider managing the R3 billion stadium as a separate legal entity.

Tabling the quarterly audit and risk committee report yesterday, committee member Peter Christianson said this was the only way the city could contain the "cash losses" incurred by the stadium.

"The committee would urge council investigates all possible options, including reopening negotiations with the rugby union to mitigate the cost to the city of operating the stadium.

Suggesting the stadium be managed as a separate entity like the International Convention Centre and uShaka Marine World, Christianson said these two had not required any cash injection from the city in the past financial year.

The losses the two entities had incurred were a result of depreciation charges on assets, he said. "There is a flow of funds, but it is difficult to establish what the figure is."

City manager S'bu Sithole said he was also concerned about the financial sustainablity of the stadium, saying the city would once again try to persuade the Sharks to move from the Mr Price Kings Park Stadium to Mabhida.

The city would also seek new partners to inject muchneeded financial aid into running the World Cup stadium. "We have to announce [before year-end] what direction we plan on taking with the stadium. We will also resume talks with the Sharks," he said.

It emerged in June that the city had paid R50 million since the World Cup to attract events to the stadium. The city has repeatedly denied claims that the stadium is a white elephant, saying it has generated an income of more than R207m in the past two years.

The city has been at loggerheads with the Sharks, which have refused to move across the road. The move, first suggested by former city manager Michael Sutcliffe, would ensure that the stadium generated revenue throughout the year.

In 2010, Sharks chief executive Brian van Zyl expressed concern that Mabhida would not be able to house the number of suites the Sharks had. They would also be paying tenants at the new stadium, whereas they owned Kings Park.

In August Sithole conceded Mabhida had shortcomings that might not be suitable for a rugby team, but said the city would address them.

At the time, Sithole said a delegation led by mayor James Nxumalo would resume negotiations with the Sharks.

Municipal spokesman, Thabo Mofokeng, said yesterday that Nxumalo had contacted Sharks officials and talks were at an exploratory stage.

"But we are hoping that in the near future talks will be at a substantial level. No decision has been reached yet, but talks will continue," he said.

Van Zyl was not available for comment yesterday.

Mofokeng dismissed statements that Mabhida was operating at a loss. "The stadium is making money. However, there is a need for transparency. The only issue that needs to be sorted is how the stadium is run and the accounting."

Daily News

 
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